The top five holdings of this small cap fund are: Emin Russell 2000 Jun18 Rtym8 N/A (0.63% of assets); Nektar Therapeutics Inc (NKTR, 0.59%); GrubHub Inc (GRUB, 0.41%); bluebird bio Inc (BLUE, 0.39%); and Aspen Technology Inc (AZPN, 0.30%).
Fidelity Small Cap Index Investor (FSSPX)
From Fidelity Monitor & Insight
In a perfect world, our model portfolios would hold Fidelity Small Cap Growth (FCPGX) rather than Fidelity Small Cap Index Investor (FSSPX) fund. But that’s not possible because Small Cap Growth has been closed to new investors for one simple reason: Its longtime lead manager, Pat Venanzi, is very, very good at what he does: buying smaller, established, high-quality companies with multi-year growth stories and sound financials. Indeed, Pat’s so good at finding them, that in order to keep money from flooding into his fund and potentially weighing on its performance, it has been closed to most new investors since February of this year.
This has forced us to do end-runs for small-cap exposure—though our “bets” in that space have been modest. Enter Small Cap Index. Tracking its Russell 2000 benchmark, the fund holds about 2,000 small-cap stocks. By “about,” it should be pointed out that half the fund (and index) actually consists of mid-caps. Those are companies whose market values generally fall between $2-to-$10 billion. That said, its median market cap is actually small at only about $2 billion; by comparison, Mid Cap Index’s market cap comes in at a much heftier $13.5 billion.
As for what a share in Small Cap Index buys you, the top-10 holdings barely account for 2% of fund assets! The low-cost Small Cap Index (expenses here are only 0.25%) provides us with our desired equity exposures. Strategically, it helps us to diversify our models without adding much risk.
Jack Bowers, John M. Boyd and John Bonnanzio, Fidelity Monitor & Insight, www.fidelitymonitor.com, 800-397-3094, September 2018